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2015 (8) TMI 336 - SC - CustomsUndervaluation of Cars imported - it was noticed that the cars were actually of higher engine capacity than declared It was noticed that prices declared by assesse were much lower than actual purchase price/commercial prices confiscation and levy of Penalty Charge of abetment - Held that - Appellant engaged services of importer who committed mischief by disclosing engine capacity of car to be below 1600 CC It was for this reason adjudication order, while confiscating cars imposed penalty upon importer as well as upon Appellant Main reason attributed for alleged conspiracy was that it was done to earn commission as per letter dated 12-12-1988 Apart from that letter, there was no evidence worth name against Appellant-1 Accordingly, no penalty could have been imposed upon Appellant and hereby set aside Appeal allowed Decided in favour of Appellant. Demand of Differential Duty Vide impugned order of CESTAT show cause notice was issued to appellant for demand of differential duty Held that - customs authorities invoked provisions of Section 28 and therefore, took benefit of extended period of limitation of five years As purchaser, appellant was fastened with liability of differential amount of duty and there was no dispute that it was to be paid by appellant as he was owner of car Thus no merit appeal found Appeal dismissed Decided against Appellant.
Issues:
1. Misdeclaration of engine capacities and prices in the import of Audi cars. 2. Imposition of penalties on appellants Mr. Atul H. Mehta and Mr. Gerson Da Cunha. 3. Abatement of appeals filed by Mr. S. A. Futehally's legal heirs. 4. Show cause notice issued to M/s Hindustan Dorr Oliver Limited for a differential amount of duty. Issue 1: Misdeclaration of engine capacities and prices in the import of Audi cars. The case involved the import of Audi cars by an importer who declared the engine capacities to be less than 1600 CC, which was later found to be incorrect. The Directorate of Revenue Intelligence initiated an investigation leading to the confiscation of cars and imposition of penalties. The appellants challenged the orders, but the Customs, Excise and Service Tax Appellate Tribunal dismissed the appeals. The main reason for misdeclaration was to earn a commission, as indicated in a letter mentioning a payment of commission. However, the Supreme Court found no evidence against appellant Mr. Mehta and concluded that no penalty could be imposed on him. The penalties imposed on Mr. Mehta and Mr. Da Cunha were quashed, and related prosecution proceedings were also quashed. Issue 2: Imposition of penalties on appellants Mr. Atul H. Mehta and Mr. Gerson Da Cunha. The penalties imposed on Mr. Mehta and Mr. Da Cunha were based on their alleged involvement in a conspiracy to make wrong declarations during the import of cars. However, the Supreme Court found insufficient evidence against Mr. Mehta and noted that he had no personal gain from the misdeclaration. Therefore, the penalty imposed on Mr. Mehta was set aside, and related prosecution proceedings were quashed. The circumstances surrounding Mr. Da Cunha were found to be identical to Mr. Mehta, leading to the quashing of the penalty imposed on Mr. Da Cunha as well. Issue 3: Abatement of appeals filed by Mr. S. A. Futehally's legal heirs. Appeals filed by Mr. S. A. Futehally against the CESTAT orders were dismissed as abated due to Mr. Futehally's demise during the pendency of the appeals. His legal heirs decided not to continue with the appeals, resulting in the dismissal of the appeals by separate orders. Issue 4: Show cause notice issued to M/s Hindustan Dorr Oliver Limited for a differential amount of duty. M/s Hindustan Dorr Oliver Limited faced a show cause notice for a differential amount of duty related to the purchase of a car from Mr. Atul H. Mehta. The notice was issued beyond the normal period of limitation, but the customs authorities invoked the extended period of limitation of five years. The appellant argued that as a bona fide purchaser, they should not be held liable for misdeclaration by the seller. However, the Supreme Court held that the liability of the differential duty falls on the purchaser, and since the car was cleared based on misdeclaration, the extended period of limitation was applicable. Consequently, the appeal was dismissed. This summary provides a detailed analysis of the legal judgment covering all the issues involved comprehensively.
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